Bits and Pieces Related to the “Net-Zero” Push

There were a few recent announcements and events that should have caught the attention of the general population over the past couple of weeks so let’s look quickly at a few of them!

Largest private storage battery in North America’ to help Imperial Oil cut emissions in Sarnia

This one was in the Financial Post back on February 16, 2022 and stated an Italian company would build a 20 MW battery storage unit for Imperial Oil that would reputedly reduce “their energy expenditures by millions of dollars per year.” They would download cheap energy in the middle of the night to charge the battery storage unit and then use it during peak hours. Many of the “Class A” customers in Ontario already take advantage of this using gas generating units firing them up during peak hours saving millions.  Scott Luft noted in a post a couple of years ago; since the ICI (industrial conservation initiative) inception in late 2011 through to the end of 2019 the cost to Class B ratepayers was approximately $1.4 billion (average of about $170 million per annum) paid to reduce the GA for those large industrial ratepayers. One should assume the Ford government could have changed the way the burden is put on Class B ratepayers to subsidize Class A ratepayers but they have done nothing. The burden continues to fall on Class B ratepayers and part of that has been transferred to taxpayers first by the Wynne led government and then increased by the current Ford led government. Hmm, wondering, would it be cheaper for Imperial Oil to buy those Clean Energy Credits (CEC) Minister Smith is considering instead of using that battery storage unit?

Wind Turbine Setback Promises Not Kept

Before and during the last election campaign the Ford led Ontario Conservative Party promised if elected they would review the setbacks for industrial wind turbines (IWT) as well as the contaminated well water in the Chatham/Kent region.  In the almost four years they have been in power they have done nothing related to either of the two foregoing promises.  WCO (Wind Concerns Ontario) have recently (for the umpteenth time) pointed out the 7,000 complaints filed about IWT noise levels and also posted an article from four years ago about the Chatham Kent well water problems which have also been ignored.  Sure, looks to be almost one of those “Promise Made, Promise Missed” sayings which Premier Ford loves to cite except for that final word.

OPG Year-end 2021

OPG released their 2021 year-end results March 10, 2022 and despite a 4.5 TWh drop (5.5%) in generation they still managed to generate $1,325 million a slight (2.6%) fall from 2020.  Forgone generation due to SBG (surplus baseload generation) dropped from 4.3 TWh in 2020 to only 1.9 TWh in 2021 meaning “water rental payments” declined by $30 million. Currently two of the Darlington nuclear units are down for refurbishment with Unit 3 scheduled to be returned to service in the first quarter of 2024 and Unit 1 in the second quarter of 2025. With both those units undergoing refurbishment we should expect greater dependency on our gas generation plants meaning both OPG’s Napanee and Lennox plants should benefit by supplying more peak generation and maintain profitability for OPG without driving costs up.

Bitcoin mining data centre opens in Sarnia

It seems back in yesteryear, mining referenced; “the business or process of working mines” and extracting ore! In recent years it seems all about setting up an elaborate data centre with complicated math problems which when solved supposedly create a “bitcoin”!   One of those bitcoin mines has recently started operations in Sarnia.  Established by “Bitfury Group, an Amsterdam-based Bitcoin mining and crypto tech company” it will start with a 16 MW capacity and expand by 12 MW by May end. It may eventually expand to 200 MW.  To put the latter number in context; a plant capable of generating 200 MW per hour is about what 200,000 average Ontario households would consume annually. The power to support the “mine” will be provided by TransAlta’s Sarnia Cogeneration Plant, a 499 MW capacity natural gas-powered plant. The TASarnia plant is also under contract to IESO and several other Sarnia located companies. Curiosity piqued about how much energy “bitcoin” operations consume globally led to an almost one year old article in the Harvard Business Review. The article suggested, at that time, it was 110 TWh (terawatt hours) which is equivalent to about 80% of Ontario’s annual consumption.  One should assume all of that 110 TWh was/is provided by reliable fossil fuels or nuclear power as intermittent wind and solar could never be relied on to ensure those mining data centres continued to operate.

As one should assume from the foregoing “bits and pieces” the path to net-zero is full of pot-holes eco-warriors and inane politicians seem unable to visualize!

PS:  I was called out on the following “(Scott Luft noted in a post a couple of years ago; since the ICI (industrial conservation initiative) inception in late 2011 through to the end of 2019 the cost to Class B ratepayers was approximately $1.4 billion (average of about $170 million per annum) paid to reduce the GA for those large industrial ratepayers.)”.  I would point out I always have a lot of faith in what Scott posts so I must assume it related to something as simple as a misplaced period “.”!  It turns out the OEB, Market Surveillance Panel back in December 2018 evaluated the ICI and in their report stated:  “In 2017, the ICI shifted $1.2 billion in electricity costs to households and small businesses—nearly four times greater than the amount in 2011. In 2017, the ICI increased the cost of electricity for households and small businesses by 10%.”

Author: parkergallantenergyperspectivesblog

Retired international banker.

2 thoughts on “Bits and Pieces Related to the “Net-Zero” Push”

  1. Hi Parker,
    Hopefully you can help me understand the notion of ‘cheap electricity at night’. As I understand it, whatever is generated is paid the contract price, regardless of time-of-day. According to IESO between 8.9c nuclear-14.8c/kWh wind. (I understand we don’t pay 49.7c for solar at night). So if the battery is charged by wind at night, we, rate/taxpayers would have paid 14.8c for the draw from the grid. The article I read mentioned Imperial and the developer would split the profits. How does the project benefit ratepayers? Ditto for the Oneida battery, and the juice to run the pumps for 11 hours at Meaford at night, for 8 hours of daytime generation.
    Thanks, Mike

    Like

    1. Pretty sure “electricity wholesalers” can buy electricity at the HOEP price and sell it to buyers but they must be licensed by the OEB. That means they can buy the electricity suplus to Ontario demand and sell it to other buyers such as Michigan, NY and presumably others like Imperial. There are lots of electricity wholesalers who trade and the OEB lists them all here: https://www.oeb.ca/ontarios-energy-sector/list-licensed-companies. Link to sample license from the OEB: https://www.oeb.ca/oeb/_Documents/Licences/licence_EW_sample.pdf

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